Contract
Exhibit 10.11
AMENDED AND RESTATED EMPLOYMENT CONTRACT
AMENDED AND RESTATED EMPLOYMENT CONTRACT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, entered into this 15th day of December, 2008,
by and between Beach First National Bancshares, Inc. and Beach First National Bank, collectively
hereinafter referred to as “Bank”, and Xxxx Xxxxxxxx, hereinafter referred to as the “Executive.”
W I T N E S S E T H T H A T:
WHEREAS, the Bank and the Executive executed the Employment Agreement on February 27, 2007
(the “Agreement”).
WHEREAS, the Bank and the Executive desire to amend and restate the Agreement for the purpose
of updating the Agreement to reflect the Final Regulations issued pursuant to Section 409A of the
Internal Revenue Code.
WHEREAS, the Bank desires to continue to employ Executive as the President and CEO of Beach
First National Bank and President and CEO of Beach First National Bancshares, Inc., and Executive
desires to continue in such employment upon the terms and conditions set forth herein below.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth
herein, the parties agree as follows:
1. Employment: The Bank agrees to continue to employ Executive as President and Chief
Executive Officer of Beach First National Bank and President and CEO of Beach First National
Bancshares, Inc., based out of Myrtle Beach, Horry County, South Carolina, for a period of two (2)
years commencing on March 1, 2006 and running for two (2) years thereafter (the “Term”), unless
previously terminated by either party in accordance with the provisions herein. The Term may
automatically extend, as provided for in Paragraph 3 herein.
In the event a “Change in Control of the Bank” occurs during the Term, the Executive’s
employment will automatically extend for an additional three (3) years. For the purposes of this
Contract, a “Change in Control of the Bank” shall mean as defined in Treasury Regulation §
1.409A-3(i)(5).
In the event there occurs a Change in Control of the Bank, any restrictions on any outstanding
incentive awards (including restricted stock) granted to the Executive under any incentive plan or
arrangement shall lapse and such incentive award or awards shall immediately become one hundred
(100%) percent vested; all stock options and stock appreciation rights granted to the Executive
shall become immediately exercisable and shall become one hundred
(100%) percent vested; and any performance units granted to the Executive shall become one
hundred (100%) percent vested.
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2. Performance: During the term of this Contract and any renewals or extensions
hereof, if any, Executive agrees to devote substantially all of his full business time, attention
and efforts to the performance of his duties for the Bank, it being understood that the Executive’s
duties are executive and administrative and subject to definition and direction by the Bank’s Board
of Directors. Nothing herein shall restrict or prevent Executive from personally, on his own
account and solely for his own benefit, investing in stocks, bonds, commodities, real estate or
other forms of investment. Further, Executive may engage in other activities, such as
professional, charitable, educational, religious and similar types of organizations and speaking
engagements, which are not, or are not likely to become, in competition, directly or indirectly,
with the Bank. Any outside investments or activities must not inhibit or prohibit the performance
of Executive’s duties or conflict with the business of the Bank.
The Executive shall at all times use his best efforts to assure (1) that the Bank is operated
in a manner that will achieve satisfactory ratings in reports of examination by the Office of the
Comptroller of the Currency and (2) that the Bank and its holding company comply with the reporting
requirements of the applicable government agencies.
3. Term: As set forth above, the Term is two (2) years. At the end of the two (2)
years, the contract will automatically renew for an additional two (2) year period unless either
party terminates the arrangement or requests renegotiation at least one (1) month before the end of
the Term.
4. Compensation: As of the date of this Agreement, the Executive shall receive a
salary of $175,000 dollars per annum from which the appropriate employment taxes and other required
deductions shall be withheld, and said salary shall be paid bi-weekly. Salary and stock options
will be reviewed annually by the executive committee of the Board of Directors. Any stock options
or similar awards shall be issued to the Executive at an exercise price of not less than the
stock’s current fair market value as of the date of grant, and the number of shares subject to such
grant shall be fixed on the date of grant.
5. Bonuses: The Executive will receive a five (5%) percent cash bonus which shall be
paid no later than March 1 of the year following the year in which such bonus is earned, subject to
the remaining provisions of this Paragraph 5. The bonus shall be calculated based on the net
income of the Company for the prior year. As used in this Paragraph 5, “net income” shall mean
income computed according to generally accepted accounting principles for Beach First National
Bancshares, Inc.
If the Bank had extraordinary gains during the prior year, the bonus may be increased at the
sole discretion of the Executive Committee. If the Bank had extraordinary losses during the
prior year or there was a failure to meet regulatory oversight requests and/or mandates, the
bonus may be decreased or eliminated altogether at the sole discretion of the Executive Committee.
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6. Other Benefits: The Bank shall make available to the Executive the life insurance,
dental and health insurance, disability insurance, retirement benefits and such other benefits or
plans as are provided to the Bank employees. The Executive may participate in said programs if
eligible. The cost for participation will be the same as applicable to all other similarly
situated employees. If the Executive is continuously employed by the Bank for ten (10) years and
then leaves such employment, the Executive will be permitted, to the extent allowed by the
applicable insurers/providers, to continue to participate in health and dental insurance and other
employee benefits, at his own expense (this obligation shall survive the termination of this
Agreement).
In addition, the Bank shall designate the Executive as the authorized user of the Bank’s Dunes
Club membership for so long as the Executive remains the President and CEO of Beach First National
Bank.
7. Vacation: The Executive may take vacation as permitted by the Employee Handbook or
other applicable Bank policies in effect during this contract period.
8. Expenses: Upon presentation of vouchers or receipts, the Executive shall be
reimbursed for all authorized expenses properly and reasonably incurred by him on behalf of the
Bank. Such reimbursements shall be paid no event later than sixty (60) days after the expense was
incurred. In addition, the Bank will provide the Executive with an automobile, for use while
employed with the Bank, with approval of the Bank Executive Committee.
9. Confidential Information and Related Matters: Executive acknowledges that the Bank
has information which is proprietary, confidential and information which constitutes trade secrets
which the Bank uses in its business and which is essential to the Bank’s continued ability to
compete and be successful. Executive also acknowledges that the release of such information would
cause serious and irreparable harm to the Bank’s business and the Bank has expended considerable
time, resources and capital in the development of this information.
The term “Trade Secrets”, shall be defined as set forth in the South Carolina Uniform Trade
Secrets Act, as amended from time to time, which defines Trade Secrets as information, including a
formula, pattern, compilation, program, device, method, technique, or process that (i) derives
independent economic value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by other persons who can obtain economic value from its
disclosure or use, and (ii) is subject to efforts that are reasonable under the circumstances to
maintain its secrecy. The term “Confidential Information” shall mean Bank materials and
information to which the public does not have ready access and to which the Executive receives
access or which the Executive develops, individually or in collaboration with others, as a result
of or in the course of his employment or through the use of any of Bank’s facilities or resources.
“Trade Secrets” and “Confidential Information” include, but are not limited to:
| 1. | The internal computer software and Bank-designed programs utilized for marketing development, sales, customer and event profiles; |
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| 2. | Marketing and advertising plans and techniques, purchasing information, price lists, price policies, vendors’ lists, profit margin information, quoting procedures, daily, weekly, monthly and yearly financial reports, customer profiles, customer contacts, security procedures and existing and potential customer data; | ||
| 3. | Personnel information such as employee’s names and addresses, salary and wage information, performance criteria and job descriptions, performance evaluations, personnel forms and procedures, training programs and procedures; | ||
| 4. | All contracts, proposals, and accounts with vendors, suppliers, and customers; | ||
| 5. | Private telephone numbers, facsimile numbers and e-mail’s; | ||
| 6. | Customer/account lists/databases for business contacts. |
Confidential information shall not include any materials or information to the extent that
such materials or information are publicly known (through no wrongful act of Executive) or
generally utilized by others engaged in the same business or activities as the Bank or were known
by Executive but not as a result of his employment hereunder. Failure to designate any
Confidential Information as “confidential” shall not affect its status as Confidential Information
under the terms of this Contract.
Executive agrees that during the Term of his employment, and for two (2) years following the
termination of such employment, Executive shall not use or disclose any Trade Secrets or
Confidential Information of the Bank, except as an employee of the Bank while acting in the Bank’s
best interests or with the prior consent of the Bank.
10. Covenant Not to Solicit Bank’s Customers or Employees: During Executive’s
employment and in the event of termination, for whatever reason, for a period of two (2) years
thereafter, Executive will not directly or indirectly, alone or in association with or on behalf of
any other person or entity, solicit, divert or take away or attempt to solicit, divert or take away
from the Bank any of its Customers or Potential Customers for any business purpose similar to that
engaged in by the Bank except in the course of performing duties assigned to him by the Bank.
“Customers” shall mean any person, firm, corporation or other entity for which Bank has performed
services during the three (3) year period immediately preceding Executive’s termination.
“Potential Customers” shall mean any person, firm, corporation or other entity which Bank has
solicited or identified for solicitation during Executive’s employment with Bank.
Additionally, during Executive’s employment and in the event of termination, for whatever
reason, for a period of two (2) years thereafter, Executive will not directly or indirectly, alone
or in association with or on behalf of any other individual, firm, company, corporation,
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association or other entity, solicit any employee of the Bank for purposes of encouraging, asking,
suggesting or otherwise inducing such person(s) to leave employment with the Bank. Employee
acknowledges that employees are an important asset of the Bank’s business and that this covenant is
necessary to protect that asset.
11. Covenant Not to Compete: During employment with the Bank and for a period of two
(2) years following the termination of such employment, Executive will not, directly or indirectly,
for himself or on behalf of others, be employed, or provide services, as a bank executive
(regardless of precise position title) within Horry County, South Carolina.
Executive acknowledges that the two (2) year restriction and the geographical restriction are
fair and reasonable for the protection of the Bank. The restrictions do not impose any undue
hardship and would not deprive Executive of the ability to earn a livelihood.
12. Termination: The Bank shall have the right to terminate this Agreement for cause
if any of the following events occur. Where applicable, the Executive should first be given not
less than seven (7) days’ notice that the Bank proposes to terminate for cause, and the Executive
should be given a reasonable opportunity to cure. The grounds for a “for cause” termination are:
| a. | The disability of the Executive (for the purposes of this Agreement, “disability” shall mean as defined by Treasury Regulation § 1.409A-3(i)(4)); | ||
| b. | Executive’s failure or refusal to comply with the policies, standards and regulations of the Bank from time to time established by the Board of Directors; | ||
| c. | Executive’s fraud, dishonesty or other misconduct in the performance of his duties on behalf of the Bank; | ||
| d. | Executive’s conviction of a felony or any other crime involving fraud or dishonesty, or any act of misconduct which relates directly or indirectly to the duties of the Executive; | ||
| e. | Entry of a final judgment against Executive for embezzlement, fraud, breach of trust, or theft; violation of laws respecting controlled substances; or other misconduct which adversely affects the Bank’s interests or reputation or the Executive’s ability to perform his duties under this Agreement. | ||
| f. | Any acts or conduct which amount to fraud, dishonesty, willful misconduct, or unethical behavior which adversely affects the Bank’s interests or reputation or the Executive’s ability to perform his duties under this Agreement; | ||
| g. | Executive becomes bankrupt or insolvent; | ||
| h. | Absenteeism not related to injury, illness, sickness or permitted vacation. |
13. Automatic Termination: To the extent there exists cause to terminate, as
outlined in Paragraph 12 herein, and the Bank has previously given the Executive notice and an
opportunity to cure, and Executive has failed to cure the problem within the time provided for
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such, this Contract shall automatically terminate. Further, this Agreement shall automatically
terminate upon the death of the Executive. For the purposes of this Agreement, “terminate” shall
mean separation from service as defined by Regulation 1.409A-1(h). Upon the automatic termination
of this Agreement as described in this Paragraph 13, the Bank shall have no further obligations
hereunder except to pay to the Executive or the Executive’s estate, as applicable, any accrued
wages or other benefits owing as of the date of termination, which payments shall be made in
accordance with the Bank’s normal bi-weekly payment schedule.
14. Arbitration: In the event of any controversy or claim arising out of or relating
to this Agreement, or the breach, termination or validity thereof, the parties will attempt in good
faith to resolve such controversy or claim amongst themselves. If the matter has not been resolved
within sixty (60) days of the commencement of such discussions (which period may be extended by
mutual agreement), then the parties hereby agree to immediately submit the controversy to binding
arbitration. The arbitration shall be conducted by a single arbitrator in accordance with the
federal Arbitration Act and the American Arbitration Association’s provisions related to
arbitration. Judgment upon the award rendered by the arbitrator may be entered by any court having
applicable jurisdiction. Arbitration shall take place in Horry County, South Carolina and
substantive law of South Carolina shall apply. Each of the parties shall use all reasonable
efforts to insure that any arbitration proceeding is completed within sixty (60) days following
notice of a request for arbitration hereunder.
At any time prior to the arbitrator being selected and accepting the responsibilities of
his/her position, a party requiring a temporary restraining order or a preliminary or temporary
injunction may pursue such injunctive relief in court within Horry County, South Carolina. The
subsequent appointment of the arbitrator shall not deprive the court of the authority to conduct a
hearing and issue an injunction. The arbitrator may subsequently cancel or modify the injunction,
or after the final hearing, cause the injunction, as issued or modified, to be made permanent.
15. Payment by the Bank: In the event that any payment required under this Agreement
would be considered a “golden parachute payment” under 12 C.F.R. §359.1, the Bank shall not be
obligated to make such payment at such time but may defer making such payment until such time as
the making of the payment would not be considered to be a “golden parachute payment.”
Notwithstanding any other provision in this Agreement, if the Executive is determined by the Board
of Directors, as of the date of termination of employment with the Bank, to be a “specified
employee,” as such term is defined in Treasury Regulation §1.409A-1(i), and if any benefits paid to
the Executive hereunder would be considered deferred compensation under Section 409A, and finally
if an exemption from the six month delay requirement of Section 409A(a)(2)(B)(i) is not available,
then all severance payments and other payment, except for other payments of base salary at the
normal payroll schedule, reimbursement of expenses, and
other than as a result of death, that would normally be paid within six months and one day
from the date of termination of employment shall be paid on the first day of the seventh month
following termination of employment.
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16. Governing Law: This Agreement shall be governed by and construed under the laws
of the State of South Carolina without regard to conflicts of laws provisions thereof.
17. Prior Agreements: This Agreement supersedes any prior agreements or understandings
by and/or between the parties and constitutes the entire agreement between the parties and may be
modified only by a writing signed by all of the parties hereto.
18. Waiver: Any waiver by the Bank of any provision or breach of any provision of
this Agreement by the Executive shall not operate as a waiver of any further provision or breach of
any provision by the Executive.
19. Severability: The parties agree that the provisions of this Agreement are
severable, and that if a portion or portions of this Agreement are found to be unenforceable, the
remaining portions of this Agreement shall be enforceable to the fullest extent permissible under
the law.
20. Attorneys’ Fees and Costs: If the parties are forced to arbitrate any dispute
related to or arising from this Agreement, they agree that the substantially prevailing party (as
determined by the arbitrator) shall be entitled to recover from the other party all reasonable
attorneys’ fees and costs incurred in relation to such arbitration.
21. Notice: For the purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed duly given when delivered by
United States Certified or Registered Mail, Return Receipt Requested, Postage Prepaid, addressed as
follows:
Beach First National Bank
0000 Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, CFO
0000 Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxx, CFO
Xxxxxx X. Xxxxxxxx III
c/o Beach First National Bank
0000 Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
c/o Beach First National Bank
0000 Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxx Xxxxx, XX 00000
or to such other address as either party may have furnished the other in writing in accordance
herewith except that notices of chance of address shall be effective only upon receipt.
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IN WITNESS WHEREOF, the Bank and the Executive have caused this instrument to be executed on
the date first above written.
| Beach First National Bancshares, Inc. | ||||
Witnesses:
|
By: /s/ Xxxxxxx X. Xxxxxx, III | |||
| Name: Xxxxxxx X. Xxxxxx, III | ||||
/s/ X
|
Title: Chairman | |||
/s/ X |
||||
| Beach First National Bank | ||||
| By: /s/ Xxxxxxx X.Xxxxxx, III | ||||
| Name: Xxxxxxx X. Xxxxxx, III | ||||
/s/ X
|
Title: Chairman | |||
/s/ X |
||||
| Executive: | ||||
/s/ X |
||||
/s/ X |
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